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Advice for Funeral Plan Providers
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Rescue and Closure Options for Pre-Paid Funeral Plan Companies
As a previously unregulated industry, entry to the pre-paid funeral plans market was relatively straightforward. However, Financial Conduct Authority (FCA) regulation came into force in July 2022, bringing with it wide sweeping changes to the industry. This has forced many funeral plan providers to reconsider their options, and in some cases make the decision to close their company for good. If you need advice on closing your pre-paid funeral plan business and placing it into liquidation, you should first seek the advice of a licensed insolvency practitioner.
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All funeral plan providers and intermediaries now need to have received the appropriate FCA authorisation in order to continue selling and providing funeral plans. Those not authorised (or exempt from the regulations) by 29 July 2022, were legally required to stop selling and administering funeral plans.
FCA regulation means there are now higher standards on governance and financial resilience of the company, additional rules regarding marketing (include a ban on cold calling), and a ban on commission being paid to intermediaries. Customers now have access to the Ombudsman meaning complaints can be referred if no resolution is achieved, and plan holders will be protected by the Financial Services Compensation Scheme (FSCS) in the event of their provider going into liquidation or otherwise ceasing to trade.
While these changes boost consumer protection, and should help to raise standards across the industry, it does mean that some firms will simply no longer be able to continue. If you operate as a pre-paid funeral plan provider or intermediary (including funeral directors), and have not applied for FCA authorisation, or your application for authorisation was rejected, you are no longer permitted to trade and you must therefore look at ways of closing down your operations.
If you are pondering the future of your funeral plans company following the implementation of FCA regulations and are considering shutting the business down, you should make it a matter of priority to contact a licensed insolvency practitioner as a matter of urgency. An insolvency practitioner will be able to talk you through the various solutions available for closing down your pre-paid funeral plans business, and what each option will mean for your company, your employees, and existing plan holders. We can provide advice whether the business is solvent or insolvent, working alongside you to wind the company down in an orderly manner.
It may be possible to transfer your back book of existing plans to another provider with appropriate authorisation prior to closure; this is something your appointed insolvency practitioner will be able to talk through with you in more detail.
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For further help and advice on closing down and liquidating your pre-paid funeral plans company, whether you have FCA authorisation or not, contact the experts at Real Business Rescue today for a free, no-obligation consultation with a licensed insolvency practitioner in your area.
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